Cake is one of the most loved bakery products. Formula constituents affect cake quality. Especially, fat in the formula alters internal and external attributes, shelf-life and nutritional value of the cake. The type of fat is important for conscious consumers for health reason. Chemically interesterified palm (in-es PO) and cottonseed oils (in-es CO) were used instead of hydrogenated cake shortening (HS) in this study. The layer cakes were prepared according to modified American Association of Cereal Chemists Method. Physical characteristics such as batter density and consistency, cake volume, crust and crumb properties and sensory attributes such as moistness, flavour, mouth-feel of cake samples prepared with chemically interesterified (in-es) and non-interesterified palm and cottonseed oil (non-in-es) blends at 0, 25, 50 and 100 (wt%) levels were compared with that of the layer cake prepared with HS. The total trans fatty acid (TFA) content of regular cake shortening was high (14.38%). The experimental shortenings have zero TFA. An increase in the level of CO in the interesterified and non-interesterified blends lowered the solid fat content, thus increasing batter density and fluidity. Favourable cakes close to the standard cake have been made by using in-es (PO:CO) at the ratio of 75:25 and 50:50 (wt%) without any significantly adverse change in sensorial properties. The results indicated that interesterification can be successfully applied in cake shortening production, resulting in decrease in the consumption of TFA.